Do municipal mergers reduce costs? Evidence from a German federal state

Sebastian Blesse and Thushyanthan Baskaran

No 176 [rev.], University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: We study the fiscal consequences of municipal mergers by making use of a largescale merger reform in the German federal state of Brandenburg. In addition to being the first evaluation of an East-German merger reform, this study contributes to the literature by exploring the fiscal consequences of both compulsory and (semi-) voluntary municipal mergers within the same institutional setting. Using a difference-in-difference design with municipality-level panel data over 1998-2005, we find substantial and immediate reductions in total, administrative, and current expenditures after compulsory mergers. Voluntary mergers, on the other hand, have smaller and less robust effects.

Keywords: municipal mergers; economies of scale; voluntary and compulsory mergers (search for similar items in EconPapers)
JEL-codes: H11 H72 H77 R53 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-eur and nep-pub
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Citations: View citations in EconPapers (35)

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Related works:
Journal Article: Do municipal mergers reduce costs? Evidence from a German federal state (2016)
Working Paper: Do municipal mergers reduce costs? Evidence from a German federal state (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:176r

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